Jack Lessenberry Essays and Interviews

Essay: State of the State - 5/9/2008

When I read Charlie Ballard’s state of the state survey this morning, a few things never mentioned in it popped into my mind.

First of all, it seems clear that anyone who wants to win Michigan this fall better stop talking about silly side issues, and start addressing our state and our nation’s serious economic problems.

So far the Democratic candidates have spent a lot of time squabbling about who was most against Iraq. Meanwhile, we’ve paid vast attention to a retired preacher whose words have since been repudiated by the candidate who used to go to his church.

Ballard’s survey, which is one of the most accurate in opinion polling, indicates what voters think of those issues. The answer is: Not much. Only seven out of every thousand feel that foreign policy is a top issue in this campaign.

And only two in every thousand think that race relations and diversity should be on the front burner. What about the so-called ‘moral issues” that seem to surface every election season?

Well, they are of concern to precisely one half of one percent of Michigan’s population. We are facing tough economic times this year, and our hearts are in our wallets.

Two thirds of us think the top issues are either jobs or the economy. When you throw in taxes and budget issues, that rises to about eighty percent of us.

When you look at these numbers, it is hard to see how any Democratic candidate for president could possibly fail to win Michigan this fall. A solid majority think George W. Bush has done a poor job.

They don’t much like Jennifer Granholm either, but she isn’t running. What they really worry about, however, could be best summed up by the title of Charlie Ballard’s last book:

Michigan’s Economic Future.

Four out of seven of us say we are worse off than a year ago. Less than one in every four of us thinks we are in better shape. We still are hopeful about the future.

Americans are traditionally the most optimistic people on the planet. But we aren’t starry-eyed. Forty-four percent of us think we’ll be better off this time next year. Thirty-five percent say worse off. And that’s the most pessimistic they’ve been since this survey was started. Voters are going to be looking for a president who can help us get out of this pothole, and avoid bigger ones.

Twenty-eight years ago, I covered another presidential campaign that looked like it would end in a dead heat. Then the candidates had a single debate. “Are you better off now than you were four years ago?” the challenger asked, “Is it easier for you to go and buy things in the stores?”

Days later, the man who said those words carried 44 states, including Michigan. Today, we once again know the answer to those questions.

For the rest of this year, voters are going to be looking for someone who can make them feel better off four years from now.

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Interview: Charles Ballard - 5/9/2008

The results of Michigan’s annual State of the State Survey were released today. The survey asked Michigan residents about their economic situation and what issues they thought were most important. Charles Ballard is a Professor of Economics at Michigan State University. He is also the director of the State of the State Survey. Michigan Radio’s Jack Lessenberry spoke with him.

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Essay: Inflation - 5/7/2008

If you really want to know how bad inflation is, you could do one of two things. You could talk to distinguished economists and bankers like Dana Johnson, and read official government reports.

Or you can talk to someone on a fixed income who has to drive a lot. Or go to the closest grocery store, and talk to the parent who is doing the weekly shopping for the wife and kids.

You are likely to get two vastly different impressions. Now don’t get me wrong. This isn’t Weimar Germany, where you had to take a wheelbarrow full of cash to the store to get a loaf of bread.

It isn’t even Argentina in the 1980s, where I watched people run out and buy merchandise on their lunch hour in case the value of their money melted to nothing by nightfall. But there is a problem with inflation in this country. It is growing, and those suffering the most are those who least can afford to do so. Which is usually the case.

To some extent, inflation hits everybody differently. When we measure inflation, we normally use the consumer price index, which is based on an attempt to create a so-called “market basket” of goods and services reflective of what the average consumer might buy.

In some areas, particularly electronics, we are actually seeing deflation. In 1950, a small black and white TV with a fuzzy picture cost about five thousand dollars in today’s money.

And you don’t have to be very old to know that I-pods and big-screen, HDTVs cost less now than just a very few years ago.

Housing is cheaper too. Which is not a good thing if, like most middle-aged Americans, your single biggest asset is in the value of your home. Oh, you are fine for now, unless you need to sell it.

Then, especially in Michigan, good luck. Where inflation is steepest these days is in food and energy prices. Those tend to be fixed and unavoidable costs for most people, especially in Michigan, where we have decidedly inferior public transportation.

Poorer people pay a higher percentage of their total income for both food and fuel. That means their incomes are shrinking.

The kind of inflation we are seeing now hurts the poor more than it does the rich -- and especially the poor whose incomes don’t automatically rise with inflation. Crash programs aimed at increasing ethanol production could harm some people more than it helps them.

Hurt them by driving up food prices. Few people have noticed, but Costco and Sam’s Club are quietly limiting the amount of rice customers can buy. They worry about coming shortages.

Alan Greenspan, the most famous chair of the Federal Reserve in history, said this week he now fears the economy is once again prone to a new round of inflation. When he speaks, you can bet his successor, Ben Bernanke, is listening. If you expect the feds to cut interest rates again in the near future, you may want to think again.

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Interview: Dana Johnson - 5/7/2008

Inflation is rising… And, it’s worrying economists and investors. Dana Johnson is chief economist of Comerica Bank. Michigan Radio’s Jack Lessenberry spoke with him about how concerned we should be about the rate of inflation.

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Essay: Taxing Concerns - 4/29/2008

I can think of a number of words for the present situation involving the Michigan Business Tax, but the only one I can say on the radio is SNAFU: situation normal; all fouled up.

Whether the legislature and governor will now fix this, no one knows. But it is worth reviewing how we got there.

Last year saw the mother of all budget battles. The state was running nearly a two billion dollar deficit, thanks to years worth of irresponsible behavior on the part of both parties.

Much of it came at the hands of term-limited legislators who didn’t have to worry about long-term responsibility. Democrats, led by the governor, were unwilling to make more deep cuts in state services or cripple our universities, and therefore the state’s future.

So, the governor timidly came out for extending the sales tax to all services. But she was so wishy-washy and timid about it that her own proposal didn’t have a chance. The Republicans, on the other hand, were big tough and manly. They insisted on tax cuts.

They said the state needs to live within its means, and stop taking so much of the taxpayers’ money. The rich taxpayers, anyway.

But when they were asked what services they wanted to slash, they ran and hid, or offered science fiction solutions.

There was one area where the notorious big-spending Democrats did feel the budget could be cut: prisons. We spend more on prisons, per capita, than any nearby state. We spend more on prisons than on higher education.

But Republicans did not want to cut prison spending. For they were big and manly, and needed to look tough on crime.

So the lawmakers dithered to the very last moment. As originally passed, the new Michigan Business Tax looked good.

What should have happened next was clear. Make what cuts could be made, and raise the income tax from 3.9 to 4.8 percent.

That would have meant some pain for everyone. But Michiganders are used to income tax rates going up and down.

When I was buying my first house they were as high as 6.35 percent, but we all survived. But last year, the lawmakers were only willing to raise taxes to 4.35 percent. Then they briefly enacted a patchwork quilt of taxes on services that didn’t have powerful lobbyists protecting them, like fortune tellers.

But the Michigan Chamber of Commerce then went bananas. So to balance the budget, as required by law, the lawmakers repealed that and slapped a surcharge on the Business Tax.

Now they need to fix this, pronto. Here‘s what to do. Go back to the drawing board and raise the Michigan income tax. Get rid of the surcharge on the Michigan Business tax, fast.

Then adjust that tax so that it rewards job creation and stable growth. That‘s something our lame-duck governor and legislature could accomplish for the good of us all. However, that would require a few profiles in courage. So don’t hold your breath.

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Interview: Gary Olson - 4/28/2008

The state legislature passed the new Michigan Business Tax last year, after repealing the much-despised Single Business Tax. Now, however, new tax bills are arriving and some businesses aren’t happy with the amount they have to pay. Economist Gary Olson is Director of the Michigan Senate Fiscal Agency. Michigan Radio’s Jack Lessenberry spoke with him.

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Essay: Unemployment Benefits - 4/18/2008

For the last six weeks, Hillary Clinton and Barack Obama have been desperately bashing each other over what seem to be progressively more silly non-issues. The latest of these features Clinton’s claim that Obama had somehow insulted working-class America, when he said it wasn’t surprising that they were getting “bitter” about the frustrating economic conditions.

The tempest that followed totally puzzled me. Virtually all the working-class and even middle-class people I know ARE somewhat bitter about the economy, even if they haven’t lost their job.

So what’s to like about $3.50 a gallon gas, and not being able to sell your house if your life depended on it?

But the Clintons and the media acted as if Obama had embraced al-Qaeda.

But the voters seem to have more sense than the pundits. Yesterday, a new Zogby poll in Pennsylvania showed that 60 percent of the voters agreed with Obama. They are bitter! Things aren’t good. And though Democrats have been slipping in the polls lately, in Pennsylvania, both contenders still lead John McCain.

And that may give you some insight into why normally party-line Republicans like Thaddeus McCotter have parted company with the Bush Administration on the unemployment bill.

Some of this happens in every administration. Presidents progressively lose power and influence, as the clock counts down in the last months of their final term. But this is a special case.

George W. Bush and his policies have been intensely unpopular for some time, and the country is now headed into a recession. This fact is going to be the single greatest economic hurdle John McCain has to overcome if he is going to be elected.

Six months from now, there are going to be two nominees, and if the race comes down to a referendum on the economy, the Democratic presidential nominee will win, whoever it is.

Michigan rejected President Bush four years ago, largely for economic reasons, and things were a lot better then. Thaddeus McCotter knows this, and he knows he is not invulnerable.

This fall, he has to run for a fourth term. He is the youngest and least-well-known Republican congressman in the state. He will be favored to win, but as the Almanac of American Politics notes, he could be vulnerable to a well-funded, top-tier Democratic opponent.

He was lucky two years ago; his opponent had almost no money, and unlike some other challengers. didn’t seem to work very hard. But McCotter got only 54 percent, his lowest showing ever.

That doesn’t mean that McCotter isn’t sincere about wanting to help unemployed workers. But as the entertaining and colorful Speaker of the House Tip O‘Neill used to say, all politics is local.

And this fall, smart local politics are going to mean opposing the Bush Administration’s economic policies. If the President vetoes extending unemployment compensation, you can bet you’ll see it on YouTube and TV commercials, right up till election day.

And the Democrats are counting on those images driving any memory of the Reverend Wright videos right off the charts.

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Interview: Thaddeus McCotter - 4/18/2008

A new bipartisan bill in the U.S. House of Representatives would help people out of work. Thaddeus McCotter, a Congressman from Livonia, co-sponsored the bill. Michigan Radio’s Jack Lessenberry spoke with about how it would help Michigan.

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Essay: Balancing Act - 4/15/2008

Governor Jennifer Granholm made a tactical mistake in her state of the state address last January, a mistake similar to the one that cost the first George Bush his presidency.

She appeared to promise to avoid raising taxes or fees of any kind this year. Now, it is absolutely true that the present shell-shocked legislature would be unwilling to raise taxes even if doing so could cure cancer and make the Detroit Lions a winning team.

Yet you never want to limit your options, or paint yourself into a corner. That is what George H.W. Bush did when he told the Republican National Convention twenty years ago, “Read My Lips.

“No New Taxes!” Two years later, he found it impossible to avoid raising taxes. Conservatives felt betrayed, and Democrats, who had been in favor of raising taxes, used the moment and the sound bite to gleefully portray Bush as a typical hypocritical politician.

Bush had some excuse for tying himself into knots over taxes. At the time, he was running for president and trailing Michael Dukakis in the polls. Dukakis later self-destructed magnificently, but when Bush promised no new taxes, he couldn’t have foreseen that.

Granholm had far less excuse and as a matter of fact, doesn’t really seem to have completely closed the door. What she said on January 29 was this: “The budget I’ll present to the Legislature next month will contain no new fees or taxes.”

As I read it, that says nothing about not raising taxes if a sudden crisis comes and the roof falls in or the Canadians cross the border and seize Port Huron. Yet her remarks were immediately seized on as a pledge never to raise taxes, and judging by everything she has said since, the governor seems to regard it that way.

She did that, I think, to try to make nice with the legislative Republicans, who still control the state senate.

But I am a bit surprised she gave away a bargaining chip in advance.

True, nobody is going to go for another general tax increase. But you can make a good case for raising hunting and fishing licenses, for example; ours are cheaper than many other states.

There are probably other fees that it would make sense to raise and which would cause a minimum amount of pain. After all, nobody makes you go hunt deer or bear, for example.

That’s not an argument in favor of more taxes. But the nation in now commonly acknowledged to be moving into a recession. That means, almost certainly, that state revenue will fall short.

Which will mean last-minute budget cuts. Now, I just renewed my driver’s license for four years. That cost me eighteen dollars.

If they kicked that up to twenty-five bucks, almost none of us would really notice the difference, and it would mean about ten million new dollars a year for the state. If that helps Lansing from further slashing aid to education, I’d be there in a heartbeat.

And bet you would be too.

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Interview: Bob Emerson - 4/15/2008

Last year Michigan gained national headlines when legislators couldn’t get the state’s finances in order. Two months ago, Governor Jennifer Granholm proposed what was hailed as a bipartisan conciliation budget. Bob Emerson is Michigan’s Budget Director. Michigan Radio’s Jack Lessenberry spoke with him about where the state’s finances stand.

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